SBAB prints Eu750m senior as fears of quick Syria attack ease

Aug 29th, 2013

SBAB took advantage of an improvement in sentiment today (Thursday) to launch a Eu750m euro senior unsecured transaction after the prospect of imminent military action in Syria, which had hit market tone yesterday, receded.

The Swedish issuer announced its seven year benchmark transaction this morning and, after building a Eu1bn order book, was able to size its issue at Eu750m. The deal was priced at 65bp over mid-swaps, which the leads fixed after going out with initial price thoughts of the high 60s area.

SBABinstagram“I think the issuer wanted a Eu750m deal and we safely navigated towards that,” said a syndicate official at one of leads BNP Paribas, Citi, Goldman Sachs and UBS.

He highlighted how sentiment had improved sharply from on Wednesday, when fears over imminent action against the Syrian regime were at their highest.

“It’s amazing how fickle the market was,” he said. “Yesterday the market was pretty horrible, but then it closed reasonably steady in the US. When we came in this morning it was steady and it has been getting better as the day has gone on.”

The deal comes after Svenska Handelsbanken sold a Eu1.25bn seven year senior unsecured issue on Monday of last week (19 August). That was priced at 60bp over mid-swaps and was said by the banker on SBAB’s deal to have been bid at 48bp over this morning.

An SBAB 1.375% 2018 senior unsecured issue was bid around the mid-40s, he added.

“Deals are being driven by the strength of the market on the particular day and you are not going to have consistently good markets,” he said. “That’s why issuers are paying fairly healthy new issue premiums.”

Viet Le, financial institutions and covered bonds syndicate manager at Crédit Agricole CIB, said that Nordic issuers’ recent moves look wise given that headline risks such as Syria, German elections and FOMC meetings could result in a “window market” in September.

“Given how busy the pipeline looks, issuers will be willing to take advantage of every bout of stability to get deals done and lock in year-end funding when they can,” he said.

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